Reliance Retail hits milestone of a billion transactions in FY23; focus on FMCG business now

With a billion transactions in the fiscal year 2023, Reliance Retail, a subsidiary of Reliance Industries, marked unprecedented growth in its operations. As per the company’s annual report, the retail business expanded its store network with over 3,300 new stores added during the financial year, taking the total tally to 18,040 stores pan-India.

Along with touching a billion transactions, the company has also registered a user base that has reached 249 million in FY 2022-23. This reflects a 29% year-on-year jump from 193 million in FY 2021-22. 

Reliance Retail further consolidated its position as the largest retailer in the country and the only Indian retailer to feature in the top 100 retailers globally.

The company's success is not limited to urban areas only; it has plans to "continue to expand reach into tier 2 and 3 markets through store network expansion” with the objective to broaden its reach and customer base.

"Reliance Retail envisions to expand its offerings and scale of operations to make best in class products available to the Indian consumers at affordable prices," says the annual report. 

Covering approximately 65.6 million sq ft of store area which is a more than 50% growth of retail space as compared to the previous year, footfalls in retail stores have also increased by 50% from last year to 780 million in FY23. 

Eye on FMCG

Moving beyond physical stores, the company added new growth initiatives to its portfolio by foraying into FMCG (fast moving consumer goods) and beauty businesses. "The FMCG business launched several products during the year including ‘Independence’ brand and the iconic beverage brand, ‘Campa’. The beauty business launched digital commerce platform ‘Tira’ and opened its flagship store in Mumbai," adds the report.

The company is targeting these businesses to ramp them up progressively in the coming period.  According to India Brand Equity Foundation (IBEF), a Trust established by the Ministry of Commerce, the FMCG market in India is expected to increase at a CAGR (compound annual growth rate) of 14.9% to reach $220 billion by 2025, from $110 billion in 2020. Further, revenue of the FMCG sector is expected to grow 7-9% this fiscal, slightly slower than the 8-9% clip of the past two fiscals, reveals data by Crisil Ratings. 

The company also expanded its product basket through acquisitions and partnerships at both local and global levels like Metro, Campa Cola, GAP, Pret A Manger, Lotus, Sosyo, Maliban, Toffeeman to list a few. “Reliance Retails runs an integrated network of physical stores, digital commerce and new commerce initiatives,” says the report. 

Eye on the future

Furthermore, Reliance Retail is scaling up its digital commerce verticals which contribute heavily to the growth of the retail segments. Through digital brands like Ajio and Netmeds and the launch of JioMart on WhatsApp, the company has achieved fast paced growth in new commerce with rapid expansion of its merchant partner network. 

"Currently, more than 3 million merchants have partnered with our new commerce platforms. Retail segments EBITDA stood at ₹17,974 crore which reflects a strong 44.7% increase from the previous year," the report discloses. 

The company ascribes the increase in EBITDA (earnings before interest, tax, depreciation and amortization) growth to benefits of scale and operating leverage leading to margin expansion across all verticals from grocery to fashion and lifestyle.